NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
TORONTO, June 29, 2018 (GLOBE NEWSWIRE) -- Apogee Opportunities Inc. (“Apogee” or the “Company”) (NEO:APE) is pleased to announce that it has closed its previously announced offering (the “Offering”) of subscription receipts of Apogee Opportunities (USA) Inc. (“Apogee Subsidiary”), a wholly owned subsidiary of the Company (each a “Subscription Receipt”) and special units of the Company (each, a “Special Unit” and together with the Subscription Receipts, the “Offered Securities”). In aggregate, 32,212,735 Offered Securities were sold under the Offering at a subscription price of $0.40 per Offered Security for gross proceeds of $12,885,094. The Offered Securities, other than 4,200,485 sold on a non-brokered basis (the “Non-Brokered Offering”), were sold pursuant to the terms of an agency agreement dated June 29, 2018 among the Company, Apogee Subsidiary, ANM, Inc. dba Halo Labs (“Halo”), Canaccord Genuity Corp. (“Canaccord”), Clarus Securities Inc. (“Clarus”) and Gravitas Securities Inc. (“Gravitas”, and together with Canaccord and Clarus, the “Agents”). All proceeds from the sale of the Offered Securities, less 50% of the commissions payable to the Agents and the Agents’ expenses (the “Escrowed Funds”), have been placed in escrow pending the satisfaction of the Escrow Release Conditions (as defined below).
The Subscription Receipts were issued pursuant to a subscription receipt agreement (the “Subscription Receipt Agreement”) among the Corporation, Apogee Subsidiary, Halo, the Agents and Odyssey Trust Company, as subscription receipt agent. The Special Units were issued pursuant to a special unit agreement (the “Special Unit Agreement”) among the Corporation, Halo, the Agents and Odyssey Trust Company, as subscription receipt agent.
Upon satisfaction of the Escrow Release Conditions and immediately prior to closing of the proposed business combination transaction (the “Transaction”) between the Corporation and Halo outlined in the press release of the Company dated May 9, 2018, and the satisfaction of other customary conditions, each Offered Security issued will be automatically exchanged for a unit (an “Apogee Unit”) comprised of one (1) common share of Apogee (or Apogee Subsidiary, as applicable) (“Apogee Underlying Share”) and one (1) common share purchase warrant of Apogee (or Apogee Subsidiary, as applicable) (“Apogee Underlying Warrant”) for no additional consideration. Each Apogee Underlying Warrant will be exercisable into one Apogee Underlying Share until December 31, 2020 and will have an exercise price of C$0.80, subject to adjustment as provided in the warrant indenture (the “Warrant Indenture”) dated June 29, 2018 entered into among the Company, Apogee Subsidiary and Odyssey Trust Company, as warrant agent. In connection with the Transaction, and as will be described in greater detail in the definitive agreement to be entered into among the Company, Apogee Subsidiary and Halo with regard to the Transaction, the Apogee Units will be exchanged for units of the Company (post-Transaction) (the “Resulting Issuer”), having the same terms as the Apogee Units.
The Company is currently working on the documentation to implement the Transaction, which is expected to close prior to September 30, 2018.
In consideration of the services provided by the Agents in connection with the Offering, the Company has paid the Agents a cash commission equal to 7.5% of the aggregate gross proceeds of the Offering (excluding the Non-Brokered Offering) and has issued the Agents compensation options (the “Agents’ Options”) equal to 7.5% of the Offered Securities sold under the Offering (excluding the Non-Brokered Offering). Provided the Escrow Release Conditions are satisfied, each Agents’ Option will be exercisable to purchase one Apogee Unit at the price of $0.40 per Apogee Unit and, following completion of the Transaction, assuming such Agents’ Option was not previously exercised, each one Agents’ Option will automatically be exchanged for one agents’ option of the Resulting Issuer which shall be exercisable to purchase one unit of the Resulting Issuer on the same terms as the Apogee Units at a price of $0.40 per unit until December 31, 2020. The Agents were also paid a corporate finance fee of $50,000 as well as 1.5% in cash and 1.5% in Agent’s Options for Offered Securities sold in the Non-Brokered Offering. In addition, under the Non-Brokered Offering, certain finders (the “Finders”) were paid 6% in cash and 6% in finder warrants, having the same terms as the Agents’ Options.
The Company has placed 50% of the cash commissions payable to the Agents and all of the fees payable to the Finders in escrow, subject to the satisfaction or completion of, among other things, all conditions precedent to the completion of the Transaction and the receipt of all regulatory, shareholder and third party approvals, if any, required in connection with the Transaction (the “Escrow Release Conditions”).
The Company has retained Odyssey Trust Company to act as the transfer agent, subscription receipt agent, special unit agent, and warrant agent in relation to the Offering and Transaction.
The Company is also pleased to announce that Halo’s previously announced Pre-RTO Oregon Regulated Offering has been oversubscribed, with Halo working on issuing up to US$10,000,000 of convertible promissory notes (the “Halo Notes”). Upon satisfaction of the Escrow Release Conditions, the Halo Notes will be converted into up to approximately 34,081,250 Apogee Underlying Shares and Warrants.
Upon completion of the Transaction, the net proceeds from the Offering will be used to: (a) fund expansion of the resulting issuer’s business operations in California and Nevada; (b) to purchase capital equipment; (c) for leasehold improvements; (d) for payment of certain liabilities; and (e) for general working capital.
All securities of the Company issued pursuant to the Offering are subject to a hold period ending on October 30, 2018. All securities of Apogee Subsidiary issued pursuant to the Offering are subject to a hold period ending on the later of: (a) October 30, 2018; or (b) the date that Apogee Subsidiary becomes a reporting issuer pursuant to applicable securities laws.
Further Information
Apogee and Halo will provide further details in respect of the Transaction including a summary of financial information in due course once available by way of press release. Trading in Apogee Shares has been halted pursuant to the policies of the NEO Exchange. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Apogee should be considered highly speculative.
The NEO Exchange has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.
For more information, please contact:
G. Scott Paterson
Chairman of Apogee
Tel: +1 (416) 917-1964
spaterson@patersonpartners.com
Kiran Sidhu
Chief Executive Officer of Halo
Tel: +1 (941) 840-4495
kiran@halocanna.com
Forward-Looking Information
This news release contains certain forward-looking statements that reflect the current views or expectations of management of Apogee and Halo with respect to performance, business and future events, including but not limited to express or implied statements and assumptions regarding the intention of Apogee and Halo to negotiate for or complete the Transaction. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which the Company and Halo operate. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. In particular, there is no guarantee that the parties will successfully negotiate and enter into a definitive agreement for the Transaction or complete the Transaction contemplated herein, that the Company’s due diligence will be satisfactory or that the Company will obtain any required shareholder or regulatory approvals. Accordingly, readers should not place undue reliance on forward-looking statements and information, which are qualified in their entirety by this cautionary statement. Neither of the Company nor Halo undertakes any obligation to release publicly any revisions to update any forward-looking statements, except as required by applicable securities law.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. Not for distribution to U.S. newswire services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws.
All information contained in this press release with respect to Halo, its business and proposed corporate reorganization and financing was supplied by Halo for inclusion herein. Apogee has not conducted due diligence on the information provided and does not assume any responsibility for the accuracy or completeness of such information.
Trading in the securities of Apogee should be considered highly speculative. The NEO Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.